[Federal Register Volume 84, Number 193 (Friday, October 4, 2019)]
[Rules and Regulations]
[Pages 53037-53052]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21227]



[[Page 53037]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 620

RIN 1205-AB81


Federal-State Unemployment Compensation Program; Establishing 
Appropriate Occupations for Drug Testing of Unemployment Compensation 
Applicants Under the Middle Class Tax Relief and Job Creation Act of 
2012

AGENCY: Employment and Training Administration, Labor.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Labor (DOL or the Department) is issuing 
this final rule to permit States to drug test unemployment compensation 
(UC) applicants and to identify occupations that the Secretary of Labor 
(Secretary) has determined regularly conduct drug testing. These 
regulations implement the Middle Class Tax Relief and Job Creation Act 
of 2012 (the Act) amendments to the Social Security Act (SSA), 
permitting States to enact legislation that would allow State UC 
agencies to conduct drug testing on UC applicants for whom suitable 
work (as defined under the State law) is available only in an 
occupation that regularly conducts drug testing (as determined under 
regulations issued by the Secretary). The Secretary is required under 
the SSA to issue regulations determining those occupations that 
regularly conduct drug testing. These regulations succeed a final rule 
issued on August 1, 2016, that Congress rescinded under the authority 
of the Congressional Review Act (CRA). These regulations, as required 
under the CRA, are not substantially the same as the rescinded final 
rule.

DATES: This final rule is effective November 4, 2019.

FOR FURTHER INFORMATION CONTACT: Gay Gilbert, Administrator, Office of 
Unemployment Insurance, U.S. Department of Labor, 200 Constitution 
Avenue NW, Room S-4524, Washington, DC 20210; telephone (202) 693-3029 
(this is not a toll-free number).
    Individuals with hearing or speech impairments may access the 
telephone number above via TTY by calling the toll-free Federal 
Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    President Obama signed the Middle Class Tax Relief and Job Creation 
Act of 2012 (the Act), Public Law 112-96, on February 22, 2012. Title 
II of the Act amended 42 U.S.C. 503 to add a new subsection (l) 
permitting States to enact legislation to require drug testing of UC 
applicants as a condition of UC eligibility under two specific 
circumstances: (1) If the applicant was terminated from employment with 
his or her most recent employer because of the unlawful use of a 
controlled substance, see 42 U.S.C. 503(l)(1)(A)(i); or (2) if the only 
available suitable work (as defined in the law of the State providing 
the UC) for that individual is ``in an occupation that regularly 
conducts drug testing (as determined under regulations issued by the 
Secretary).'' See 42 U.S.C. 503(l)(1)(A)(ii). States are not required 
to drug test in either circumstance; the law merely permits States to 
enact legislation to do so when either of the two circumstances is 
present. A State may deny UC to an applicant who tests positive for 
drug use under either of these circumstances. See 42 U.S.C. 
503(l)(1)(B).
    On October 9, 2014, the Department published a Notice of Proposed 
Rulemaking (NPRM) determining occupations that regularly conduct drug 
testing for the purposes of 42 U.S.C. 503(l)(1)(A)(ii). See 79 FR 61013 
(Oct. 9, 2014). After reviewing the comments received, the rule, as 
proposed in the 2014 NPRM, was modified, and on August 1, 2016, the 
Department published regulations determining occupations ``that 
regularly conduct[ ] drug testing'' in the Federal Register as 20 CFR 
part 620 (81 FR 50298). The 2016 final rule established, as occupations 
that regularly conduct drug testing, only those occupations 
``specifically identified in a State or Federal law as requiring an 
employee to be tested for controlled substances,'' as well as specific 
occupations identified in Federal regulations and any occupation that 
required employees to carry firearms. See former 20 CFR 620.3 (81 FR 
50298). It became effective on September 30, 2016.
    On March 31, 2017, President Trump signed a joint resolution of 
disapproval under the authority of 5 U.S.C. 801(b), CRA (5 U.S.C. 801 
et seq.), Public Law 104-121. Section 801(b) provides that a 
disapproved rule shall not take effect and that such a rule may not be 
reissued in substantially the same form unless authorized by Congress. 
Consistent with this law, the Department published the notice of 
revocation of the regulations in the Federal Register at 82 FR 21916 
(May 11, 2017).
    Because 42 U.S.C. 503(l) was not repealed or amended following the 
resolution of disapproval, the statute continues to require the 
Secretary to issue regulations to enable the determination of 
occupations in which drug testing regularly occurs. To comply with both 
the mandate to issue regulations to enable the determination of 
occupations in which drug testing regularly occurs, and the CRA 
prohibition on reissuing the rule ``in substantially the same form,'' 
on November 5, 2018, the Department issued a new NPRM substantially 
departing from the rescinded final rule. See 83 FR 55311.
    In this final rule, the Department implements a more flexible 
approach to the statutory requirement that is not substantially the 
same as the rescinded 2016 final rule, enabling States to enact 
legislation to require drug testing for a far larger group of UC 
applicants than the previous final rule permitted. This flexibility 
recognizes the diversity of States' economies and the different roles 
of employer drug testing across the States. The Department has 
determined that imposing a nationally uniform list--like the one-size-
fits-all approach that the Department attempted in the disapproved 2016 
rule--does not fully effectuate Congress' intent regarding what 
constitutes employer drug testing in an occupation. Employers exercise 
a variety of approaches and practices in conducting drug testing of 
employees. Some States have laws that impose very minimal restrictions 
on employer drug testing of employees, while other States have very 
detailed and prescriptive requirements about what actions the employer 
may take; this means occupations may be regularly drug-tested in some 
States, but not in others. This diversity among States also renders an 
exhaustive list of such occupations impractical. This final rule lays 
out a flexible standard that States can individually meet under the 
facts of their specific economies and practices. Its substantially 
different scope and fundamentally different approach satisfies the 
requirements of the CRA, while still meeting the requirement of 42 
U.S.C. 503(l)(1)(A)(ii) to issue regulations addressing what 
occupations regularly conduct drug testing.
    When developing the previous proposed rule published in 2014, the 
Department consulted with a number of Federal agencies with expertise 
in drug testing to inform the proposed regulations. Specifically, the 
Department consulted with the

[[Page 53038]]

Substance Abuse and Mental Health Services Administration (SAMHSA) in 
the U.S. Department of Health and Human Services (HHS); the U.S. 
Department of Transportation (DOT); the U.S. Department of Defense 
(DOD); the U.S. Department of Homeland Security (DHS); DOL's Bureau of 
Labor Statistics (BLS); and DOL's Occupational Safety and Health 
Administration (OSHA). The Department consulted these agencies because 
they have experience with required drug testing. DOD and DHS deferred 
to SAMHSA for interpretation of the drug testing requirements, and the 
Department gave due consideration to the SAMHSA guidance when 
developing the 2014 proposed rule.

II. Summary Discussion of the Final Rule

    The rule implements the statutory requirement that the Secretary 
issue regulations determining how to identify ``an occupation that 
regularly conducts drug testing'' for the purposes of permitting States 
to require an applicant for UC, for whom suitable work is only 
available in an occupation that regularly drug tests, to pass a drug 
test to be eligible for UC.
    In this final rule, the Department takes a fundamentally different 
approach to identifying these occupations than it did in the previous 
final rule that Congress later rescinded. The list of occupations in 
the 2016 final rule that ``regularly'' conduct drug testing was limited 
to certain specifically listed occupations and those in which drug 
testing is required by Federal or State law. In this final rule, the 
Department has expanded that list in light of the congressional 
disapproval of the 2016 final rule. It expands the consideration of 
what occupations regularly conduct drug testing by accounting for 
significant variations in State practices with respect to drug testing. 
An occupation that regularly drug tests in one State may not regularly 
test in another, making a national one-size-fits-all list impractical 
and infeasible, and therefore inappropriate. Thus the Secretary has 
determined in this rule to include in the list of occupations that 
regularly conduct drug testing those occupations for which each State 
has a factual basis for finding that employers in that State conduct 
drug testing as a standard eligibility requirement for employing or 
retaining employees in the occupation. This new addition provides 
substantially more flexibility to States and recognizes that, in some 
States, drug testing is regularly conducted in more occupations than 
were initially included in the 2016 final rule.
    This final rule also provides definitions of key terms. In 
particular, for the purpose of determining occupations that regularly 
test for drugs, this rule defines an ``occupation'' as a position or a 
class of positions with similar functions or duties. While the 
Department considered adopting a specific taxonomy of occupations, such 
as the Standard Occupational Classification (SOC), this rule does not 
do so, in order to provide flexibility to States to choose an approach 
that best matches its workforce. For further explanation, see the 
preamble discussion related to Sec.  620.3.
    In this rule, the Department is adopting the finding in the 2016 
Rule that any occupation for which Federal or State law requires drug 
testing is among those that are drug tested ``regularly.'' The 
Department recognizes that Federal and State laws may evolve in 
identifying which positions or occupations are required to drug test. 
Thus, this rule allows for occupations identified in future Federal or 
State laws as requiring drug testing to be occupations that States will 
be able to consider for drug testing of UC applicants.
    This rule also includes a section on conformity and substantial 
compliance.
    Finally, this final rule includes minor changes from the proposed 
rule to add clarity. Specifically, changes were made to the rule text 
in the introductory text of section 620.3 and in paragraphs (b) through 
(g) of that section.

III. Summary of the Comments

Compliance With the Congressional Review Act

    Comment: The Department received one comment regarding the CRA and 
the Department's initiation of new rulemaking. This commenter asserted 
that the NPRM is inconsistent with the CRA prohibition in 5 U.S.C. 
801(b)(2) because that provision, according to the commenter, ``forbids 
the executive branch from re-regulating the same matter without 
additional legislation.''
    Department's Response: The commenter misunderstands the prohibition 
in 5 U.S.C. 801(b)(2). That provision does not prohibit re-regulating 
``the same matter;'' rather, it prohibits issuing a regulation on the 
same matter that is ``substantially the same'' as the rescinded 
regulation.
    Section 801(b)(2) provides, in relevant part, that a [disapproved] 
rule may not be reissued in substantially the same form, and a new rule 
that is substantially the same as such a rule may not be issued, unless 
the reissued or new rule is specifically authorized by a law enacted 
after the date of the joint resolution disapproving the original rule. 
It is clear from a plain reading of this provision that a reissued or 
new rule on the same subject is permitted provided that it is not 
substantially the same. Further, the legislative history for Public Law 
115-17 demonstrates Congressional intent that the Department issue a 
new rule permitting drug testing for a broader scope of occupations 
than the rescinded rule permitted. See, e.g., 163 Cong. Rec. H1200-01 
(Feb. 15, 2017) (Rep. Brady, describing the eventually-rescinded rule 
as ``incredibly narrow,'' stated that it ``ignored the intent of 
Congress,'' and noted that a comment was submitted by the House Ways 
and Means Committee during the rulemaking process calling for the 
Department to issue a broader rule).
    The Department looks to the plain meaning of the term 
``substantially.'' The Merriam-Webster Dictionary defines 
``substantial,'' the adjective form of the adverb ``substantially,'' as 
``being largely but not wholly that which is specified.'' The Oxford 
English Dictionary provides two slightly different definitions of 
``substantially:'' (1) ``[t]o a great or significant extent;'' and (2) 
``[f]or the most part; essentially.'' These definitions suggest that a 
rule is ``substantially the same'' where it is for the most part the 
same as the prior rule. The changes in this rule clear the bar. The 
scope of occupations that ``regularly conduct drug testing'' is the 
central issue, and the change in scope here is a significant change to 
the previous final rule. Thus, a rule that substantially broadens the 
list of occupations that ``regularly conduct[ ] drug testing'' clearly 
is not ``in substantially the same form'' as the much more restrictive 
final rule that Congress rescinded. Further, there is very little 
legislative history regarding the CRA interpreting what is meant by a 
rule ``reissued in substantially the same form,'' or a ``new rule'' 
that is ``substantially the same,'' and the courts have not ruled on 
the matter.
    In the NPRM, the Department proposed a substantially different and 
more flexible approach to the statutory requirements than the rescinded 
final rule, enabling States to enact legislation to require drug 
testing for a larger group of UC applicants than the previous final 
rule permitted. The proposed rule's substantially different scope and 
fundamentally different approach satisfies the requirements of the CRA 
that the Department not reissue a rule that is ``substantially the 
same'' as the

[[Page 53039]]

rule disapproved by Congress. Thus, no changes have been made to the 
rule text as a result of the comment.

Additional Comments Received on the Proposed Rule

    The analysis in this section provides the Department's responses to 
public comments received on the proposed rule. If a section or 
paragraph that appeared in the proposed rule is not addressed in the 
discussion below, it is because the public comments submitted in 
response to the proposed rule did not substantively address that 
specific section, or that no comments were received on that section or 
paragraph; thus, no changes have been made to the regulatory text. 
Further, the Department received a number of comments on the proposed 
rule that were outside the scope of the proposed regulations. 
Accordingly, the Department offers no response to such comments. These 
comments expressed support for or opposition to drug testing in 
general, discussed personal narratives, or were opinions on marijuana 
legalization.
    The Department's proposed rule to implement 42 U.S.C. 
503(l)(1)(A)(ii) was published on November 5, 2018 (83 FR 55311). 
During the 60-day public comment period, the Department received a 
total of 211 public comments on the proposed rule. Of those, 56 
comments were deemed substantive, and three were duplicates. The 
Department, in the NPRM, sought comments on the entirety of the 
proposed rule, in addition to specific areas where the Department 
solicited comments, as noted below. The comments of general application 
received in response to the solicitation have been grouped by subject 
matter and are discussed below. No changes have been made to the rule 
text as a result of any of the comments received.

General Comments

    Comments: Several commenters voiced support for the proposed rule 
as a means to help prevent fraud and waste, and to ensure a more 
efficient unemployment insurance (UI) program.
    Department's Response: The issues raised by the comments point to 
an important issue for the Department; that is, the integrity of the UI 
program. This rule and 42 U.S.C. 503(l)(1)(A) provide a means of 
ensuring continued integrity by enabling States to enact laws that will 
bolster their findings that a claimant is able and available for work 
as required by Federal law and, therefore, eligible for benefits.
    Comments: A number of commenters asserted that drug testing should 
be mandatory to receive unemployment benefits, or any government 
benefit. These commenters asserted that if job applicants and employees 
are required to undergo drug testing for certain occupations, it stands 
to reason that individuals seeking unemployment benefits or any form of 
government assistance should be drug tested as well.
    Department's Response: The specific language in 42 U.S.C. 
503(l)(1)(A) limits States' authority to test UC applicants for drugs 
to only two circumstances: Where the individual was fired from his or 
her last employer for testing positive for drugs; or where suitable 
work is only available in an occupation that regularly tests for drugs. 
Thus, the Department is limited in these regulations to implementing 
the specific terms of the statute, and makes no change to the final 
rule.
    Comments: Several commenters asserted that the drug testing 
permitted by the NPRM is inconsistent with the prohibition against 
unreasonable searches in the Fourth Amendment to the U.S. Constitution. 
The objections cited Federal court decisions that have struck down 
mandatory drug testing as a condition of benefits under the Temporary 
Aid to Needy Families program in Lebron v. Secretary of Florida, 
Department of Children & Families, 772 F.3d 1352 (11th Cir. 2014), and 
as a condition of candidacy for elected office in Chandler v. Miller, 
520 U.S. 305 (1997). One commenter asserted that the proposed rule 
would be ``saddling states with the prospect of costly litigation,'' 
and that it ``would leave states wide open to likely legal challenges 
in which most courts would rule against the states.'' Another 
commenter, citing Chandler v. Miller, above, asserted that ``a 
suspicion-less drug test can only be Constitutional if the Government 
shows a `special need' to conduct testing,'' and that the ``proposed 
regulation makes no attempt to limit the State's use of this authority 
to Constitutional boundaries of a `special need.' '' A commenter also 
asserted that the Department, ``as administrator of the Federal-State 
UI system, has a responsibility to foster compliance with all 
applicable Constitutional and statutory requirements'' and ``should not 
issue regulations that specifically authorize drug testing that would 
clearly violate the Fourth Amendment.''
    Most commenters acknowledged that any possible Constitutional 
issues would arise from inappropriate State implementation of drug 
testing, rather than from the regulations themselves. For example, 
several commenters (in identical or nearly identical language) stated:

    The proposed regulation does not attempt to limit the State's 
use of this authority to drug test UI applicants to Constitutional 
boundaries. The previous version of this regulation may have passed 
Constitutional muster because of its close adherence to the language 
of the authorizing statute. However, in this NPRM, the Department's 
open-ended invitation to impose drug testing on applicants for 
unemployment compensation based on a standardless exercise in 
alleged fact-finding opens the door to widespread application of 
this authority in a manner in clear violation of the Fourth 
Amendment.

    Department's Response: As the comments acknowledge, the NPRM itself 
did not conflict with the Fourth Amendment. The NPRM merely proposed 
adding a provision permitting a State to identify additional 
occupations in that State where employers ``regularly'' require drug 
testing as a condition of employment, provided that the State has a 
factual basis for doing so; the proposed rule did not mandate that 
States engage in drug testing, and the proposed rule did not relieve 
the States from the responsibility to ensure that whatever practices 
they adopt meet Constitutional requirements. Thus, the NPRM did not 
require any action by States that would conflict with the Constitution, 
nor did it grant States authority to implement the rule in a way that 
would not meet Constitutional requirements.
    In granting broader flexibility to States to identify occupations 
that regularly test for drugs in the State where there is a factual 
basis for doing so, the Department neither encourages nor discourages 
drug testing as a condition of UC eligibility. The flexibility granted 
is in keeping with the nature of the UC system as a Federal-State 
partnership that grants broad discretion to States to implement their 
UC programs. Granting States broader flexibility to implement drug 
testing in occupations that regularly test for drugs in their 
particular State does not violate the Fourth Amendment, and States that 
choose to drug test under this rule are responsible for implementing 
drug testing in a manner consistent with Constitutional requirements. 
Accordingly, the Department makes no changes to the final rule in 
response to these comments.
    Comments: Numerous commenters asserted that some individuals could 
have difficulty accessing testing services, for a variety of reasons: 
Distance to testing services and lack of transportation, particularly 
in rural areas; lack of childcare; and lack of income for 
transportation.
    Department's Response: The Department issued Unemployment Insurance 
Program Letter (UIPL) No.

[[Page 53040]]

2-16 (October 1, 2016) to ensure both physical and meaningful access to 
the UC program. As a result, State UC agencies are already required to 
ensure access to services, a requirement that will also cover drug 
testing under this rule. Thus, the Department has not made any changes 
to the rule as a result of these comments.
    Comments: Several commenters asserted that the drug testing 
provision in 42 U.S.C. 503(l)(1)(A)(ii) would add unfair and 
unnecessary hurdles to receipt of UC, and will increase harm to workers 
and families already struggling to meet basic needs. Still others 
stated that government, and in particular the Department, should be 
focused on helping more individuals obtain jobs and on protecting 
workers by addressing challenges to the unemployment insurance system 
before the next recession. Other commenters urged the Department to 
withdraw the proposed rule, with one commenter asserting that the 
Department should follow the clear intent of 42 U.S.C. 
503(l)(1)(A)(ii).
    Department's Response: The purpose of this regulation is to 
implement 42 U.S.C. 503(l)(1)(A)(ii) permitting States to enact 
legislation providing for drug testing of UC applicants if the 
applicant ``is an individual for whom suitable work . . . is only 
available in an occupation that regularly conducts drug testing[.]'' 
This rule implements the statute and assists States in determining that 
individuals are able and available for work, and can accept work when 
it is offered in their occupations that regularly conduct drug testing.
    Therefore, the Department makes no changes to the final rule in 
response to these comments.
    Comments: Several commenters expressed concern that this regulation 
would adversely affect low-wage workers, low-income communities, and 
people of color. Among those commenters, one specifically addressed the 
wage gap between white males and black males, white women and black 
women, and white men and women and Latinos and Latinas.
    Department's Response: The purpose of this rule is to implement the 
provisions of sec. 2105 of the Middle Class Tax Act (the Act), which 
amended sec. 303 of the Social Security Act (SSA) to add sec. 
303(l)(1)(A), permitting States to drug test UC applicants in the 
specified limited circumstances.
    This rule is not designed to negatively impact any specific 
demographic among applicants for UC. It permits States to conduct drug 
testing of UC applicants for whom suitable work is available only in an 
occupation that regularly conducts drug testing. States that choose to 
drug test applicants under the rule are responsible for implementing 
the drug testing program in a manner that does not result in 
discrimination against protected classes.
    States' UI programs remain subject to sec. 188 of the Workforce 
Innovation and Opportunity Act and 29 CFR 38.2(a)(2), so they are 
prohibited from discriminating against UC applicants on the bases of, 
among other protected characteristics, race, color, sex, national 
origin, and disability. See 29 U.S.C. 3248; see also 29 CFR 38.2(a)(2) 
and 38.5. Section 188's prohibition on discrimination extends to 
policies and procedures that have discriminatory effects as well as 
those that have discriminatory purposes. See, e.g., 29 CFR 38.6, 38.11, 
and 38.12. States are required to collect and maintain data necessary 
to determine whether they are in compliance with the provisions of sec. 
188. See 29 CFR 38.41.
    The Department previously made clear to the States in UI Program 
Letter (UIPL) No. 2-16 (published October 1, 2015) that 
nondiscrimination laws applicable to State UC agencies prohibit 
discrimination based on both disparate treatment and disparate impact.
    Therefore, the Department makes no changes to the final rule in 
response to these comments.
    Comments: Numerous commenters expressed concern that drug testing 
UC applicants stigmatizes both unemployment insurance use and 
individuals who use or are addicted to drugs. Some of those commenters 
suggested that the rule is an attempt to demonize UC applicants, or 
that requiring drug testing of UC applicants would be arbitrary and 
would result in humiliating UC applicants. One commenter suggested the 
rule require States to create funded programs for drug treatment.
    Department's Response: The purpose of this regulation is to 
implement the provisions of 42 U.S.C. 503(l)(1)(A)(ii) to permit States 
to test UC applicants for drugs if the applicant ``is an individual for 
whom suitable work . . . is only available in an occupation that 
regularly conducts drug testing[.]''
    This rule, and the enabling statute, do not permit states to 
indiscriminately test UC applicants for illegal drug use. Rather, only 
UC applicants who meet the statutory threshold set out above may be 
tested. Those applicants should, based on prior employment in such an 
occupation, already know that pre-employment or post-hire drug testing 
is a requirement for the occupation in which suitable work is available 
to them. Further, such testing is related to the individual being able 
to and available for work.
    There is no intent to stigmatize employment in these occupations or 
receipt of UI benefits, and no stigma should attach simply because the 
State UI agency conducts such a test as a condition of the applicant 
being able and available for work in occupations which regularly 
conduct drug testing. Nor is such testing intended to demonize or 
humiliate the UC applicant for whom drug testing is a usual condition 
of hire, or continued employment, in those occupations that regularly 
test employees for drugs, either pre-hire or post-hire. Thus, the 
Department makes no change to the final rule based on these comments.
    As noted in the preamble discussion related to Sec.  620.4, below, 
States may provide information on the availability of treatment for 
drug use or addiction if they so choose, but may not use federal UI 
administrative funding to do so.

Discussion of Comments by Section

Comments Regarding Sec.  620.2 Definitions
    The NPRM proposed definitions for several key terms used in the 
proposed regulatory text. These are: Applicant, controlled substance, 
occupation, suitable work, and unemployment compensation. The 
Department received no comments on the definitions of occupation, 
suitable work, and unemployment compensation. Accordingly, the 
definitions of these terms are adopted in the final rule as proposed.
Definition of Applicant
    Comment: The Department received one comment agreeing with the 
analysis in the Preamble that limited the definition of ``applicant'' 
to an individual filing an initial claim for unemployment compensation. 
The commenter asserted that the definition adopts an interpretation of 
``applicant'' that has been consistently applied by both the previous 
and current administrations at DOL, and which appears well supported by 
analysis of the language of various statutory provisions relating to 
initial applications for unemployment compensation and claimants for 
continuing compensation. There were no comments opposed to the proposed 
definition. Accordingly, the definition of ``applicant'' is adopted in 
the final rule as proposed.
Definition of Controlled Substance
    With regard to the definition of ``controlled substance,'' the 
Department,

[[Page 53041]]

as required by statute (see 42 U.S.C. 503(l)(2)(B)), adopted the 
definition of that term as set forth in sec. 102 of the Controlled 
Substances Act (Pub. L. 91-513, 21 U.S.C. 802). As explained in that 
Act, ``[c]ontrolled substance'' means a drug or other substance, or 
immediate precursor, included in schedule I, II, III, IV, or V of part 
B of 21 U.S.C. 801 et seq. The term does not include distilled spirits, 
wine, malt beverages, or tobacco, as those terms are defined or used in 
subtitle E of the Internal Revenue Code of 1986.
    Comments: The Department received comments related to the proposed 
definition of ``controlled substances,'' which includes marijuana, and 
its impact on States with laws that decriminalize the use of marijuana 
for medical and/or recreational purposes.
    One commenter asserted that the Department was acting arbitrarily 
and capriciously by defining ``controlled substances'' as that term is 
defined in Federal law in light of the fact that various States have 
decriminalized the possession of marijuana for medical and/or 
recreational use. By adopting such a definition, the commenter 
asserted, some States may ``deny unemployment compensation benefits to 
an individual using marijuana for either medical or recreational 
purposes that are not in violation of any State law.'' This commenter 
also noted that the NPRM preamble did not even discuss marijuana 
decriminalization in some States ``thus failing the [Administrative 
Procedures Act] APA requirement that an agency explain the basis for 
its actions.'' Another commenter argued that ``the implementation of 
drug testing requirements for UI applicants as endorsed by this 
proposed rule would disproportionately punish individuals who use 
marijuana in compliance with State law.''
    Several commenters expressed concerns that the proposed rule would 
exacerbate the existing conflict between Federal and State laws 
regarding marijuana use and would disproportionately punish individuals 
whose marijuana use is decriminalized in their respective States. These 
commenters added that the proposed rule ``could create issues with 
states [sic] rights and workers who live in states with legal marijuana 
but work in states without it.'' As a solution, a couple of commenters 
suggested that States could provide waivers to those UC claimants who 
live in States that have decriminalized the use of marijuana, noting 
that the United States Army has adopted such a solution.
    Department's Response: Proposed Sec.  620.4(a) of the NPRM 
provides, in relevant part, that ``[s]tates may require drug testing 
for unemployment compensation applicants, as defined in 
sec.[thinsp]620.2, for the unlawful use of one or more controlled 
substances, as defined in Sec.  [thinsp]620.2, as a condition of 
eligibility for unemployment compensation. . . .'' Proposed Sec.  620.2 
defines ``controlled substances'' consistent with how that term is 
defined in sec. 102 of the Controlled Substances Act (21 U.S.C. 802).
    The Department has made no changes to the final rule in response to 
these comments. As noted above, the statute requires that the 
Department define ``controlled substance'' according to a provision in 
a Federal statute, the Controlled Substances Act. Thus, regardless of 
how State laws treat marijuana, the Department is statutorily required 
to adopt the definition of ``controlled substances'' as set forth in 
the Controlled Substances Act. See 42 U.S.C. 503(l)(2)(B). The 
Department does not have the authority to adopt a definition of 
``controlled substances'' different from what Congress expressly 
provided. Furthermore, the Department has no statutory authority to 
prohibit a State from testing for a substance that is a ``controlled 
substance'' under Federal law if the other statutory requirements to 
allow testing are met. This is the case regardless of whether the State 
has partially or wholly decriminalized marijuana possession or use, or 
whether an interstate UC claim is filed by a claimant who resides in a 
State where marijuana is decriminalized and seeks work in another State 
where it is not decriminalized.
    We also note proposed Sec.  620.4(a) is permissive in nature and 
not mandatory. It provides that a State may drug test, as a condition 
of UC eligibility, ``for the unlawful use of one or more controlled 
substances'' as defined in Federal law. The plain language of this 
regulation allows drug testing; it does not require it. Further, it 
permits States to omit any controlled substances they so choose from 
drug testing. Thus, States that choose to drug test as a condition of 
UC eligibility are permitted to omit marijuana, or any other controlled 
substance(s), from drug testing. Accordingly, the rule does not 
conflict with any State laws that partially or wholly decriminalize 
marijuana, nor can it resolve any conflicts of law within or between 
States. Regarding the comments that States provide waivers to 
interstate claimants who live in States that have decriminalized 
marijuana but work in States that have not, the rule already provides 
sufficient flexibility for States to exempt claimants from drug testing 
in such circumstances, or to omit marijuana from drug testing 
altogether. However, the Department has no authority to require States 
to provide such waivers.
Comments Regarding Sec.  620.3 Occupations That Regularly Conduct Drug 
Testing for Purposes of Determining Which Applicants May Be Drug Tested 
When Applying for State Unemployment Compensation
    In this regulation, the Department recognizes both the historic 
Federal-State partnership that is a key hallmark of the UC program, as 
well as the wide variation among States' economies and practices. This 
rule recognizes the need for States' participation in identifying which 
occupations regularly conduct drug testing in each State, and whether 
additional occupations should be included. Section 620.3 describes a 
number of different occupations that the Department has determined 
regularly drug test. States may use this list, in addition to the 
broader criterion, in identifying occupations for which drug testing is 
regularly conducted, based on the criteria set by the Secretary under 
these regulations. A minor edit to the introductory text of this 
section, inserting, ``enact legislation to,'' more closely aligns the 
regulation with the statutory text, but does not change the substance 
of the requirements in this section.
    Paragraph (a) includes the class of positions that requires the 
employee to carry a firearm as an ``occupation'' that regularly drug 
tests.
    Paragraphs (b)-(g) include various specific occupations that were 
listed in the previous rule as ones that regularly require drug test, 
since various Federal laws require drug testing of employees in each of 
these occupations. This rule identifies in paragraphs (b)-(g) six 
specific sections of regulations issued by several agencies of DOT and 
the Coast Guard that identify classes of positions that are subject to 
drug testing. Any position with a Federal legal requirement for drug 
testing was determined to constitute an occupation that regularly 
conducts drug testing. However, this final rule departs from the NPRM 
by removing the parentheticals describing the categories of 
occupations. This is because the parentheticals did not fully describe 
the regulations cited and because the regulations are subject to 
amendment that could render the descriptions obsolete.
    Paragraphs (h) and (i) include in the list of occupations that 
regularly

[[Page 53042]]

conduct drug testing any occupation that is required to be drug tested 
under any Federal law or under the law of the State seeking to drug 
test UC applicants in that occupation. The law need not currently 
exist; future Federal or State law requiring drug testing is included 
under this provision. As with the previous six sections, any position 
with a legal requirement for drug testing has been determined to 
constitute an occupation that regularly conducts drug tests.
    Paragraph (j) adds to the list of occupations that regularly drug 
test a significant provision not contained in the previous final rule, 
and that fundamentally transforms the regulatory approach and scope of 
the proposed regulations. This fundamental change satisfies the 
requirements of the CRA and allows the Department to fulfill its 
continuing statutory obligation to regulate. Paragraph (j) provides 
that where there is a factual basis for doing so, a State may identify 
additional occupations in that State which require pre-hire or post-
hire drug testing as a standard eligibility requirement. This provision 
reflects the Secretary's determination that, because there is wide 
variation among State economies and employment practices, it is not 
practicable to exhaustively list all occupations that ``regularly 
conduct[ ] drug testing.'' Instead, the Department sets out a Federal 
standard by which it is possible to assess--under Federal, not State, 
law--whether a State has a sufficient basis to require drug testing of 
a particular class of UC applicants. The Federal standard is as 
follows: When identifying an occupation that regularly conducts drug 
testing, the State must identify a factual basis for its finding that 
employers conduct pre-employment or post-hire drug testing as a 
standard eligibility requirement for obtaining or maintaining 
employment in the identified occupation. Factual bases may include, but 
are not limited to: Labor market surveys; reports of trade and 
professional organizations; and academic, government, or other studies. 
This proposed standard effectuates the plain meaning of the Act's 
authorization of drug testing where suitable work ``is only available 
in an occupation that regularly conducts drug testing.'' Section 
303(l)(1)(A)(ii). Once this final rule takes effect, the Department 
will review States' factual bases through reports authorized under 42 
U.S.C. 503(a)(6) and 20 CFR 601.3; these reports are currently made 
through States' submissions of ETA Form MA 8-7 (OMB control number 
1205-0222) prior to implementation by the State or any changes to State 
UI laws. Such reports would similarly be submitted prior to 
implementation of drug testing of applicants in occupations the State 
identifies as meeting the Federal standard described above.
    The NPRM requested comments on the proposed standard and whether 
the Department should instead impose a heightened standard of evidence 
to demonstrate that an occupation is one that regularly conducts drug 
tests and, therefore, is an occupation for which drug testing is a 
standard eligibility requirement. The NPRM sought comments also on what 
heightened level of evidence of drug testing would be appropriate, if 
commenters believed a different standard than what was proposed in the 
NPRM should be used.
    Comments: The Department received a number of comments regarding 
the proposed standard, many asserting that the standard was vague. 
Several commenters favored a heightened standard of evidence, arguing 
that the standard in the NPRM is insufficient. A few commenters also 
recommended an alternative standard.
    One commenter argued that the proposed rule provides ``little to no 
guidance concerning how the determination'' of occupations is to be 
made. The commenter asserted that ``the regulatory text merely requires 
the State to have an undefined `factual basis,' '' and that the NPRM 
preamble ``offers little guidance with its undescriptive and 
nonexclusive list of vague examples ranging from reports of trade and 
professional organizations to a virtually standard-less `other 
studies'.'' The commenter asserted that this ``is the polar opposite of 
a determination under DOL regulations.''
    Another commenter stated that ``we the regulated community have no 
idea what the standard is that DOL has proposed, so we don't know how 
to assess what would be `heightened' standard.'' The commenter added 
that ``[a]t the least, a standard should require facts and conclusions 
that would survive a Daubert challenge to an expert witness in federal 
court.''
    Department's Response: The Department does not consider the 
standard of evidence in the proposed rule to be vague or overly broad. 
The Department also disagrees with the assertion that the proposed rule 
provides insufficient guidance on how the determination of occupations 
must be made. Proposed Sec.  620.3, like the rescinded final rule, 
contained a list of specific occupations in paragraphs (a) through (g), 
and a provision permitting drug testing for UC eligibility of any other 
occupation required to be drug-tested as a condition of employment 
under Federal or State law in paragraphs (h) and (i). Proposed 
paragraph (j) was added to account for any variations that may exist 
from State to State with regard to occupations that regularly conduct 
drug testing, but where such testing is not required by law. As 
described elsewhere, the proposed rule required a factual basis for 
identifying such occupations, and the Department will receive and 
review such identifications. Acknowledging these variations across 
States is consistent with the flexibility granted to States in the 
Federal-State partnership that Federal UC law broadly embraces.
    Regarding the portion of the comment suggesting that DOL adopt a 
standard that would at least survive a Daubert challenge, the comment 
offered no clear alternative standard of evidence. A Daubert challenge, 
originating from the court decision in Daubert v. Merrell Dow 
Pharmaceuticals, Inc., 509 U.S. 579 (1993), which established criteria 
for the admissibility of scientific expert testimony, refers to the 
process for challenging the validity and admissibility of expert 
testimony. The expert is required to demonstrate that his/her 
methodology and reasoning are scientifically valid and can be applied 
to the facts of the case. However, Daubert does not provide an 
administrable substantive standard of evidence, or a clear level of 
evidence, that the Department or a State can apply in the context of 
this regulation.
    Therefore, the Department makes no changes to the final rule in 
response to these comments.
    Comments: Many commenters argued that the Department should use 
submissions from States to narrowly define the relevant occupations 
into a nationally applicable list.
    Department's Response: The Department finds that using submissions 
of information from States to produce a nationally applicable list of 
occupations is not administratively feasible. It is extraordinarily 
difficult to develop a nationally applicable list of occupations that 
regularly drug test, beyond those that are legally required, while 
leaving flexibility to account for differences between practices in 
different States to allow for full implementation of the Congressional 
mandate. An occupation that is regularly drug-tested in some States 
might not be regularly drug-tested in others; a national list might not 
capture this discrepancy, and, indeed, could result in even broader 
drug testing than is consistent with the statute. Therefore, the 
Department declines this recommendation and makes no changes

[[Page 53043]]

to the final rule as a result of these comments.
    Comment: One commenter argued that the Department should impose 
``quality standards'' in the States' gathering of information for 
submissions to the Department on occupations that regularly drug-test; 
however, the commenter did not specify any recommended ``quality 
standards.''
    Department's Response: The Department finds it is not 
administratively feasible to provide more definite standards in the 
rule text while maintaining States' flexibility to provide factual 
information from a wide range of sources. The Department monitors and 
exercises oversight of all aspects of all States' UC administration, 
and works with States to address deficiencies of conformity or 
substantial compliance with Federal law requirements. Just as with all 
aspects of oversight of State UC, the Department will provide oversight 
of States to ensure conformity and substantial compliance with this 
rule and take appropriate action as necessary. The Department makes no 
changes to the final rule in response to this comment.
    Comment: A commenter criticized abandoning the rescinded 
regulations' reliance on SOCs established by the Bureau of Labor 
Statistics (BLS), because these codes ``are used in a variety of other 
setting [sic] for other uses such as establishing prevailing wages,'' 
which the commenter asserted undermined a statement in the NPRM that 
the BLS SOCs ``may not provide the best mechanism to support states in 
identifying occupations in which employers regularly drug test.''
    Department's Response: That the proposed rule does not rely on BLS 
SOCs does not mean States may not rely on SOCs to identify occupations. 
Indeed, the rescinded final rule did not define occupations by BLS 
SOCs, and the NPRM in 2014 that preceded the rescinded final rule 
(which left unchanged the NPRM definition of ``occupation'') explained 
that the reliance on a ``class of positions'' in the definition was in 
contrast to reliance on single occupations identified in the BLS SOCs. 
The reference to BLS SOCs in the rescinded final rule was merely 
illustrative, not a requirement to use the system in determining 
occupations. As in the rescinded final rule, the absence of BLS SOCs in 
the proposed rule does not discourage States from embracing SOCs. 
However, the Department does not find it necessary or desirable to 
impose the SOCs established by BLS, as it may not always be the best 
system through which to classify occupations for the purposes of these 
regulations.
    Therefore, the Department makes no changes to the final rule in 
response to this comment.
    Comment: A commenter cited the Conference Report accompanying the 
enactment of the statutory provision on UC drug testing, noting the 
Conference Report stated that drug testing is permitted under 42 U.S.C. 
503(l)(1)(A)(ii) only where passing a drug test is ``a standard 
eligibility requirement.'' The commenter argued that drug testing is 
not a standard eligibility requirement in any occupation unless drug 
testing is conducted for every single employee in that occupation. The 
commenter argued that a requirement that all employees in an occupation 
be drug tested would be consistent with the treatment of employees in 
virtually all of the other categories in proposed Sec.  620.3 with 
regard to drug testing.
    Department's Response: The Department disagrees that ``a standard 
eligibility requirement'' necessarily requires that all employers drug 
test all employees in an occupation in order to include the occupation 
as among those subject to drug-testing. Such an interpretation is not 
required by the statute or the Conference Report language cited by the 
commenter. An occupation that ``regularly'' drug tests, or for which 
drug testing is ``a standard eligibility requirement,'' need not 
uniformly require testing under the plain meaning of either term. The 
plain meaning of ``standard'' does not support the commenter's 
recommendation. The Merriam-Webster Dictionary defines ``standard'' in 
the most relevant definition as ``regularly and widely used.'' The 
Oxford Dictionary in the relevant definition describes ``standard'' as 
something ``used or accepted as normal or average.'' The Cambridge 
Dictionary defines ``standard'' as ``usual or expected.'' None of these 
definitions requires that a practice be universal in order to be 
``standard.'' Thus, the Department does not find a ``standard 
eligibility requirement'' need be universal in order to be standard. To 
be ``regular'' or ``standard'' it is sufficient that drug testing in an 
occupation be usual. While the other categories listed in this 
regulation do cover occupations in which drug testing is required by 
all employers, that is not the statutory requirement.
    Therefore, the Department makes no changes to the final rule in 
response to this comment.
    Comments: Commenters also suggested that the Department consider 
the reason an occupation regularly tests employees and whether that 
reasoning has a ``nexus with unemployment in general or with whether 
the claimant is able and available for work in particular.''
    Department's Response: The Department did not make changes in 
response to the comments suggesting that the standard should connect 
drug testing to unemployment. The purpose of the standard is to 
implement the requirements of 42 U.S.C. 503(l). Section 503(l) of 42 
U.S.C. does not require a connection between unemployment and drug 
testing, only that it be established that an occupation regularly 
conducts drug testing. However, though no such connection is required, 
if the only suitable work available to an individual is in an 
occupation that regularly conducts drug testing, there is a strong 
connection between being able to pass a drug test and being able and 
available for work as required by 42 U.S.C. 503(a)(12). Under the final 
rule, the Department intends to give States the flexibility to consider 
these reasons in their particular circumstances.
    Comments: Several commenters expressed a concern that the proposed 
standard set forth in the NPRM for identifying occupations that 
regularly conduct drug testing ``is rife with potential for abuse and 
for inappropriate motives.'' These commenters suggested that the 
Department should require States to provide more information about the 
fact-finding conducted than is specified in the proposed rule. In 
general, these commenters did not specify the abuse or inappropriate 
motives that would be risked, nor did they recommend an alternative 
heightened standard for the Department to consider. A few of the 
commenters elaborated that drug test providers contracted by States 
might have an inappropriate financial self-interest to encourage 
broader drug testing by States than is merited by evidence, which could 
inappropriately influence the decisions of policy makers to authorize 
broad drug testing.
    Department's Response: The Department did not make changes in 
response to these comments. These assertions are unrelated to the 
requirements of 42 U.S.C. 503(l), and issues such as these, if they 
arise, will be addressed administratively by the Department's 
monitoring and oversight of Sec.  620.3(j).
    Comments: Several commenters argued that the proposed rule could 
lead, in various ways, to discrimination. One commenter argued that the 
proposed standard could allow States to ``depress equal access to 
earned benefits,'' and that the Department should take steps to 
minimize this

[[Page 53044]]

possible consequence by ``working with states to make sure working 
people have fair access to earned benefits.'' However, this commenter 
did not recommend an alternative standard of evidence. Relatedly, one 
commenter argued for heightened standards of evidence because drug 
testing ``should not be permitted as a blanket for all occupations 
which could lead to discriminatory implementation.'' This commenter 
also did not specify an alternative standard of evidence. Another 
commenter argued that ``[t]he degree of flexibility this regulation 
gives to states has tremendous potential to target occupations that are 
more likely to employ working people of color.'' Similarly, another 
commenter argued that it is ``problematic'' that each ``state can 
decide which professions to routinely drug test,'' because the 
``tendency is to administer drug tests to industries which 
disproportionately employ people of color.'' These commenters also did 
not recommended a specific alternative standard.
    Department's Response: Commenters' concerns relate to a State's 
implementation of paragraph (j), rather than to the proposed Federal 
standard for drug testing by States. This particular provision does not 
provide States with unfettered discretion to drug test UC applicants 
and it must be viewed in connection with the other requirements of this 
rule, namely that drug testing of UC applicants in general is not 
permitted unless the only suitable work for an applicant is in an 
occupation that regularly conducts drug testing. As discussed above, 
States' UI programs are subject to sec. 188 of the Workforce Innovation 
and Opportunity Act, and States are prohibited from discriminating 
against UC applicants on the bases of the protected characteristics 
listed above, which include race and color. Also, States will be 
subject to Department monitoring and oversight of occupations to be 
drug tested under proposed Sec.  620.3(j). Therefore, the Department 
made no changes to the final rule in response to these comments.
    The Department also asked for comments on any suggested additions, 
deletions, or edits to the list and descriptions of occupations that 
regularly conduct drug testing, or on the scope of the latitude 
accorded to States in the proposed approach.
    Comments: The Department received a number of comments that 
proposed paragraph (j) constitutes an unlawful delegation to the States 
of the Department's authority to determine which occupations regularly 
conduct drug testing. In general, commenters advanced two types of 
arguments toward this conclusion. One was that Federal law prohibits a 
Federal agency from delegating its authority to an outside entity 
absent clear Congressional authorization to do so. A second argument 
was that proposed paragraph (j) is arbitrary and capricious under Sec.  
706 of the APA.
    In support of the unlawful delegation argument, commenters relied 
on several court decisions that have held that ``[a]n agency 
[unlawfully] delegates its authority when it shifts to another party 
almost the entire determination of whether a specific statutory 
requirement has been satisfied or where the agency abdicates its final 
reviewing authority.'' Fund for Animals v. Kempthorne, 538 F.3d 124, 
133 (2d Cir. 2008), citing U.S. Telecom Ass'n v. FCC, 359 F.3d 554, 567 
(D.C. Cir. 2004), and Nat'l Park & Conservation Ass'n v. Stanton, 54 
F.Supp.2d 7, 19 (D.D.C. 1999). According to these commenters, paragraph 
(j) impermissibly shifts the entire determination of which occupations 
regularly drug test by allowing each State to identify those 
occupations within its State that regularly drug test without providing 
guidance concerning how the States should make such determinations.
    One commenter noted that ``[w]hile an agency may be able to 
delegate some amount of `fact gathering' to an outside party [citing 
the U.S. Telecom court decision above], the grant of authority to 
States to determine occupations that regularly drug test goes far 
beyond fact gathering.'' Specifically, the commenter argued that 
``[d]etermining how to interpret and define the concept of `regularly' 
is the antithesis of fact gathering. It is exercising discretion and 
policy-making.'' The commenter added--

    [T]he requirement to determine which occupations regularly drug 
test leaves states with another substantial interpretative task. 
While ``occupations'' do not drug test, employers drug test and 
employees are drug tested. Thus, a decision has to be made in 
interpreting how to determine what to measure. To the extent that 
this provision can be interpreted to carry out Congressional intent, 
DOL, not state agencies, must exercise discretion to decide whether 
an occupation regularly drug tests when measured by the percentage 
of employers of that occupation drug testing employees in that 
occupation or when measured by the percentage of employees in that 
occupation who are drug tested.

    Separately, regarding delegation, some commenters asserted that the 
State UC agencies in their respective States have a pattern of 
administrative practices that are inconsistent with State and Federal 
Constitutional requirements. These commenters argued that ``[t]here is 
no basis whatsoever to assume that state agencies delegated with new 
administrative authority to deny benefits will use such authority 
consistent with the U.S. Constitution or the rules and regulations of 
the Social Security Act.''
    Department's Response: The Department disagrees with the comments 
that the rule improperly shifts to the States the determination of 
which occupations regularly conduct drug testing. The proposed rule 
explicitly determined, in paragraphs (a) through (g) of proposed Sec.  
620.3, specific occupations that may be drug-tested, thus directly 
determining many occupations that are regularly drug tested. Similarly, 
paragraphs (h) and (i) specify that States may drug test for 
occupations in which employees are required by Federal or State law to 
be drug tested. Paragraph (j) of Sec.  620.3 allows each State to 
identify occupations in that State that regularly drug test and relies 
on each State as a fact-finder with regard to its local circumstances. 
Furthermore, the Department will review additional occupations 
identified by the State. Each State will be required to submit for 
Departmental review and oversight the occupations that the State finds 
regularly conduct drug testing as a standard eligibility requirement 
for obtaining or maintaining employment in the State, and the factual 
bases on which it relied. Thus, contrary to the commenters' assertions, 
this rule does not abdicate the Department's responsibility to 
determine the occupations that regularly drug test. It simply allows 
each State to identify factual bases for finding that additional 
occupations regularly conduct drug testing in that particular State. 
Such a grant of limited discretion is lawful, particularly as the 
Department will retain reviewing authority over the States' 
identification of occupations that regularly conduct drug testing, as 
well as the authority to take action to ensure conformity and 
substantial compliance with Federal law requirements. See Kempthorne, 
538 F.3d 124 (finding that the Fish and Wildlife Service did not 
abdicate its authority to regulate the takings of migratory birds when 
it granted limited discretion to state agencies to determine whether 
the killing of a migratory bird in the agency's State was necessary to 
prevent the depredation of fish, wildlife, plants, and their habitats 
in the State's local area); see also Stanton, 54 F.Supp.2d at 19 
(finding that ``[t]he relevant inquiry'' is whether the Federal agency 
``retained

[[Page 53045]]

sufficient final reviewing authority'' over the subordinate's actions.)
    Finally, regarding some commenters' assertions that a State UC 
agency might not administer the program consistent with State or 
Federal Constitutional requirements if given discretion, the Department 
monitors and exercises oversight of all aspects of all States' UC 
administration, and works with States to address deficiencies of 
conformity or substantial compliance with Federal law requirements. 
Just as with all aspects of oversight of State UC, the Department will 
monitor States to ensure conformity and substantial compliance with 
this rule and take appropriate action as necessary.
    Therefore, the Department makes no changes to the final rule in 
response to these comments.
    Comments: Separately from the above arguments regarding improper 
delegation, many commenters asserted that proposed Sec.  620.3(j) is 
arbitrary and capricious under the APA. One commenter in particular 
elaborated in detail this argument. This commenter argued that the 
Department:

was arbitrary and capricious in adding section 620.3(j) of the NPRM 
after determining in its 2016 Final Rule that (1) ``whether an 
occupation is subject to `regular' drug testing was not chosen as a 
standard here it would be very difficult to implement in a 
consistent manner'' and (2) ``we are unable to reliably and 
consistently determine which occupations require `regular' drug 
testing where not required by law.''

See 81 FR 50300 (August 1, 2016).
    The commenter continued that the proposed rule provides ``no 
specific explanation of its change in position on those two statements 
in the preamble to the 2016 Final Rule,'' as required by law. The 
commenter made four additional assertions arguing the proposed rule is 
arbitrary and capricious in its delegation of authority. First, the 
commenter argued that it is arbitrary and capricious ``to assign 
responsibility for determining which occupations regularly drug test to 
States.'' Second, the commenter argued that it is arbitrary and 
capricious ``to allow States to have inconsistent determinations of 
which occupations drug test in the face of a Congressional provision 
clearly calling for one uniform determination on that issue by 
specifically assigning that responsibility to DOL.'' Third, the 
commenter argued that it is arbitrary and capricious ``to allow States 
to individually determine how to interpret the concepts of `regular' 
and `standard eligibility requirement' without [the Department] 
explaining why . . . [such an approach] was consistent with the 
statutory requirement that occupations that regularly drug test be 
determined under regulations issued by DOL and why a uniform 
application of the drug testing requirements for unemployment 
compensation applications is not required.'' Fourth, the commenter 
argued that it is arbitrary and capricious ``to allow States to gather 
facts concerning which occupations drug test without detailed quality 
standards setting forth how that fact gathering should be conducted.''
    Some commenters argued that the Department failed to set out with 
any specificity what would constitute a sufficient factual basis for 
identifying occupations that regularly drug test. These commenters 
stated that ``[r]eports by trade and professional organizations may 
reflect initiatives that do not comport with the narrow strictures of 
[Sec. 303(l)(1)(A)(ii), SSA] and may not establish a `factual basis' 
for testing. In addition, allowing `other studies' provides so little 
guidance that it is rendered essentially meaningless.'' Commenters 
added, ``Congress clearly assigned to the DOL, in the plain language of 
the authorizing statute, the responsibility to define which occupations 
are covered.''
    The commenters argued that sec. 303(l), SSA, was drafted as it was 
in order ``to limit inappropriate influence in the determination of 
which working people could be required to take drug tests as a 
condition of receiving UI.'' Another commenter suggested that proposed 
Sec.  602.3(j) was subject to potential inappropriate influence, that 
``[d]epending on the experience rating system in a state, employers 
could also be incentivized to adopt new drug testing regimes solely for 
the purpose of minimizing their liability for unemployment benefits.''
    Department's Response: The Department has considered the various 
assertions that the proposed rule is arbitrary and capricious in 
violation of the APA and, for the following reasons, disagrees.
    First, the assertion that the 2016 final rule has any bearing on 
this proposal is inconsistent with the CRA. 5 U.S.C. 801(f) provides 
that ``[a]ny rule that takes effect and later is made of no force or 
effect by enactment of a joint resolution under sec. 802 shall be 
treated as though such rule had never taken effect.'' Public Law 115-17 
invalidated the 2016 final rule, stating that the rule ``shall have no 
force or effect.'' As this rule is not an amendment to the prior, 
rescinded final rule, it is not necessary under the APA to explain the 
rationale for taking a different approach in this rule than was taken 
in the 2016 rule.
    Second, even if the Department was required to explain why it had 
changed its earlier position, the argument that the Department did not 
give an adequate rationale for departing from the rescinded 2016 final 
rule is inaccurate. By rescinding the previous rule, Congress rejected 
the approach in the 2016 rule of limiting the standard to occupations 
drug tested as a condition of employment under State or Federal law. 
Given the CRA's prohibition on republishing the 2016 rule in 
substantially the same form and the requirement that the Department 
promulgate a regulation to implement sec. 303(l) of the SSA, the 
Department was legally required to adopt a different regulatory 
approach. The rescinded final rule noted that it rejected the 
regularity of drug testing in private employment as a standard because 
it would be very difficult to implement in a consistent manner and that 
the Department determined that it would be unable to reliably and 
consistently determine which occupations regularly require drug testing 
beyond those required by law. In developing its new proposal, the 
Department, for the reasons explaining proposed Sec.  602.3(j) in the 
preamble to the NPRM, adopted a standard that overcomes the issues 
identified by the commenter by utilizing States' expertise to research 
and identify which occupations drug test regularly in their own States.
    Regarding other arguments that the proposed rule is ``arbitrary and 
capricious,'' first, the proposed rule does not assign responsibility 
for determining which occupations regularly drug test to States. 
Rather, under the proposed rule, the Department is leveraging the 
expertise of the States to identify occupations in which employers 
regularly drug test in their States, while the Department retains 
authority to review, monitor, and oversee States' identification of 
those occupations and the factual bases for their identification. 
Second, 42 U.S.C. 503(l), by its terms, does not require a 
determination of occupations which regularly test for drugs in all 
States; it simply prohibits the Department from interfering with State 
requirements for drug testing of an applicant in an occupation that 
regularly conducts drug testing. As mentioned above, the proposed rule 
is consistent with the rescinded final rule, which also allowed 
differences across States based on the occupations each State's law 
required to be drug-tested as a condition of employment. The proposed 
rule departs from the rescinded final rule, not in

[[Page 53046]]

allowing ``inconsistent'' choices of occupations across States, but in 
whether drug testing must be a State law requirement to consider the 
occupation one in which drug testing is a regular requirement for 
employment. Third, it is inaccurate to describe the proposed rule as 
deferring to States the interpretation of what constitutes ``regular'' 
drug testing and what constitutes a ``standard eligibility 
requirement.'' Rather, the proposed rule articulates a Federal 
standard--the Secretary's interpretation of those statutory terms, not 
the States' interpretations--under which States make factual findings, 
i.e., as the NPRM preamble clearly states, the proposed rule requires 
States to have a factual basis for identifying additional occupations 
that regularly conduct drug testing, which is subject to the 
Department's review. Further, the Department has never required a 
``uniform application of the drug testing requirements'' across the 
States. As noted above, the rescinded final rule also permitted States 
to drug test different occupations based on what occupations must be 
drug-tested as a condition of employment under different States' laws. 
Fourth, there is no requirement that regulations contain specific 
``quality standards'' for fact-gathering by States, nor is it arbitrary 
or capricious for the proposed rule to let the ``factual basis'' 
standard be fleshed out through Department review of States' particular 
findings. Rather, this flexible approach is consistent with case law 
discussed above, and with the Federal-State UC partnership, by which 
the Department is responsible for monitoring and overseeing broad 
requirements that States must meet to receive administrative grants, 
and for employers in a State to receive credits against their Federal 
unemployment taxes.
    Regarding assertions that the proposed rule is arbitrary and 
capricious because it lacks specificity, and that the Department has 
deferred the decision-making regarding which occupations regularly 
conduct drug testing to States, proposed Sec.  620.3(j) does not remove 
the Department from exercising independent judgment in the 
determination of occupations. Rather, the NPRM made clear that any 
``factual basis'' by a State for identifying an occupation that 
regularly conducts drug testing is subject to Departmental review. The 
Department retains authority to find that a State lacks sufficient 
factual basis to include an occupation it wishes to drug test. 
Therefore, the Department retains independent judgment.
    Finally, regarding incentives to drug test, it is highly unlikely 
that employers in an occupation will adopt drug testing based upon the 
distant potential that other employers will adopt testing to result in 
the occupation being one which regularly requires drug testing in order 
to reduce their experience rating. Further, as a number of commenters 
pointed out, Federal funding for administration of the UI program is 
currently low, and States will have a strong incentive to control the 
cost of drug testing because they will receive no additional Federal 
funding for those costs. Thus, these objections are unsupported, and 
are not a basis to find proposed Sec.  620.3(j) to be arbitrary or 
capricious.
    Therefore, the Department makes no changes to the final rule in 
response to these comments.
    Comment: One commenter expressed that States should be permitted to 
drug test for occupations that are potentially dangerous or those that 
regularly involve drug testing, and another commenter stated that drug 
testing should be limited to those positions with legitimate safety 
concerns and proper justification for what the commenter characterized 
as invasive testing.
    Department's Response: The purpose of this regulation is to 
implement the provision in 42 U.S.C. 503(l)(1)(A)(ii) that States may 
drug test applicants for UC for whom the only suitable work is in an 
occupation that regularly conducts drug testing. Safety concerns can be 
a reason why drug testing is regularly conducted for some occupations. 
However, limiting those occupations for which a UC applicant may be 
tested for drugs to only those where there are safety concerns is 
inconsistent with the statutory language permitting drug testing where 
an occupation regularly conducts such testing.
    Congress disapproved the earlier regulation implementing 42 U.S.C. 
503(l)(1)(A)(ii), which limited testing to those positions or 
occupations where there are certain safety concerns or where drug 
testing is required by Federal or State law. Thus, it is clear Congress 
intended the regulation to reflect a broader interpretation of 
``occupations that regularly drug test,'' not a narrower one. As a 
result, the Department makes no changes to the rule based on this 
comment.
    The Department likewise sought comments on its conclusion that it 
is impracticable to develop a nationally uniform list of occupations 
that regularly drug test, given the wide variations in regional 
economies, employer practices, and in State law.
    Comments: One commenter stated that creating a uniform list of 
occupations that drug test is impractical, and the Secretary, in the 
alternative, should provide national guidelines for categories of 
positons for which States may drug test.
    Several commenters made statements of support for the promulgation 
of a nationally uniform list of occupations that regularly drug test, 
stating that, by not creating one, the Department was not adhering to 
the authorizing statute or the will of Congress. Commenters stated that 
the Department was avoiding its responsibility by allowing flexibility, 
and did not explain how it reached its interpretation of Congressional 
intent. Commenters asked for these occupations to be defined narrowly, 
because the occupation must be the only viable option available for the 
applicant to find new employment. In the absence of a nationally 
uniform list, one commenter suggested, the Department should keep a 
list of nationally applicable occupations.
    One commenter stated the Department suffered a lack of will to 
exhaustively catalogue all employment-related drug testing requirements 
under State laws, and to do so for the benefit of this rulemaking is 
not beyond the Department's capabilities. The commenter asserted that 
the Department lacked any ``robust'' evidence to support the asserted 
impracticality of creating such a list.
    Department's Response: The Department considered these comments and 
maintains that the creation of a nationally uniform list is impractical 
and will not provide the flexibility needed by States to implement the 
will of Congress. The Department disagrees with the comments that it 
improperly shifted to the States the determination of which occupations 
regularly conduct drug testing. The proposed rule explicitly 
identified, in paragraphs (a) through (g) of proposed Sec.  620.3, 
specific occupations that may be drug-tested, thus directly determining 
many occupations that may be drug tested. Similarly, paragraphs (h) and 
(i) specify that States may drug test for occupations in which 
employees are required by Federal or State law to be drug tested. 
Paragraph (j) of proposed Sec.  620.3 provides States with fact-finding 
authority to identify occupations that regularly drug test in their own 
State and relies on each State as a fact-finder with regard to its own 
localized context. Furthermore, the Department will review any 
occupations the State identifies and the facts presented to 
substantiate adding them. Each State will be required to submit for

[[Page 53047]]

Departmental review and oversight the occupations that the State finds 
regularly conduct drug testing as a standard eligibility requirement in 
the State, and will require the State to submit the factual bases it 
relied on. Thus, contrary to the commenters' assertions, this rule does 
not abdicate the Department's responsibility to determine the 
occupations that regularly drug test. It simply grants States fact-
finding authority to find factual bases for identifying additional 
occupations that regularly conduct drug testing in their own States. 
Such a grant of fact-finding authority is lawful, particularly as the 
Department will retain reviewing authority over the States' 
identification of occupations that regularly conduct drug testing, as 
well as the authority to take action to ensure conformity and 
substantial compliance with Federal law requirements. See Kempthorne, 
538 F.3d 124; see also Stanton, 54 F.Supp.2d at 19.
    Therefore, the Department makes no changes to the final rule in 
response to these comments.
    Comments: Several commenters expressed support for the Department's 
determination, stating that it recognized the value and importance of 
giving flexibility to individual States to identify what type of 
oversight system is most appropriate for employers and employees, and 
that State governments and officials are more familiar with the 
industries and occupations of a State. This will alleviate arbitrary 
determinations, stated one commenter, by recognizing State officials' 
power to develop policies pertinent to drug testing in the State. 
Flexible standards based on State-specific economies, one commenter put 
forth, means the regulations States enact will ensure effectiveness and 
consistency within the State. These commenters stated that it would be 
poor public policy to apply the same standards to vastly different 
economies. Standards for a State with a large manufacturing base may 
not be appropriate for a State with a primarily rural economy, stated 
one of these commenters.
    Department's Response: The Department considered these comments and 
will be maintaining the policies and approaches noted in the 
commenters' supportive statements.
    Finally, the Department asked for comments on its planned approach 
of using submissions through ETA's Form MA 8-7 as the method for 
reviewing States' factual bases for finding that employers conduct pre-
employment or post-hire drug testing as a standard eligibility 
requirement for obtaining or maintaining employment in the identified 
occupation.
    Comments: Some commenters asserted that the ETA Form MA 8-7 
``requires too little analysis on the part of the States.'' These 
commenters stated that the form should require reasoned analysis of 
attached supporting documentation to address the rationale for drug 
testing in specific occupations and whether that reasoning should 
extend to prevent deserving claimants from receiving UC.
    Department's Response: Form MA 8-7 is not intended to be a stand-
alone tool for analyzing materials submitted by States. Rather, it is 
the form used by the Department to collect the necessary information, 
authorized under section 303(a)(6), SSA and 20 CFR 601.3, to ensure 
State laws, regulations, and policies conform to and comply with 
Federal law. The Department has an established methodology in place to 
identify and review all changes to States' UI programs. By reviewing 
materials submitted with ETA Form MA 8-7, which States are already 
required to use for all changes in law, regulations, policies, and 
procedures, the Department will analyze a State's factual basis for 
identifying an occupation as one in which employers conduct pre- or 
post-employment drug testing as a standard eligibility requirement for 
obtaining or maintaining employment. As provided in 20 CFR 601.3, the 
Secretary of Labor requires States to submit State laws and plans of 
operation for implementing those laws. The Department implements this 
provision through ETA FORM MA 8-7 which requires States to submit ``all 
relevant state materials.'' Plans of operation in this context includes 
states' factual bases for identifying any additional occupations that 
regularly conduct drug testing pursuant to the Rule. In addition, the 
Department retains oversight authority and will conduct routine 
monitoring of State administration of the UI program, including state 
implementation of the drug testing provisions of 42 U.S.C. 503(l)(1)(A) 
and this final rule. As a result, the Department makes no changes to 
the final rule.
Comments Regarding: Sec.  620.4 Testing of Unemployment Compensation 
Applicants for the Unlawful Use of a Controlled Substance
    Consistent with 42 U.S.C. 503(l), Sec.  [thinsp]620.4 provides that 
a State may require applicants to take and pass a test for the illegal 
use of controlled substances as a condition of initial eligibility for 
UC under specified conditions, and that applicants may be denied UC 
based on the results of these tests. States are not required to drug 
test as a condition of UC eligibility based on any of the occupations 
set out under this final rule. States may choose to do so based on some 
or all of the identified occupations; however, States may not, except 
as permitted by 42 U.S.C. 503(l)(1)(A)(i) (governing drug testing of 
individuals terminated for the unlawful use of a controlled substance), 
conduct drug testing based on any occupation that does not meet the 
definition in Sec.  [thinsp]620.3 for purposes of determining UC 
eligibility.
    Paragraph (a) provides that an applicant, as defined in Sec.  
[thinsp]620.2, may be tested for the unlawful use of one or more 
controlled substances--also defined in Sec.  [thinsp]620.2--as an 
eligibility condition for UC, if the individual is one for whom 
suitable work, as defined by that State's UC law, is only available in 
an occupation that regularly conducts drug testing, as determined under 
Sec.  [thinsp]620.3. As discussed in the Summary of the proposed rule, 
the term ``applicant'' means an individual who is filing an initial UC 
claim, not a claimant filing a continued claim. Thus, States may only 
subject applicants to drug testing.
    Paragraph (b) provides that a State choosing to require drug 
testing as a condition of UC eligibility may apply drug testing based 
on one or more of the occupations under Sec.  [thinsp]620.3. This 
flexibility is consistent with the statute, which permits, but does not 
require, drug testing, and the partnership nature of the Federal-State 
UC system.
    Paragraph (c) provides that no State would be required to drug test 
UC applicants under this part. This provision was not in the 2016 final 
rule, but again reflects the partnership nature of the Federal-State UC 
system and the Department's understanding that the Act permits, but 
does not require, States to drug test UC applicants under the 
identified circumstances.
    Comment: In response to the NPRM's broader, more flexible approach 
for identifying occupations that regularly drug test, one commenter 
raised a concern that such an approach ``risks conflicting with 
statutory protections mandated by the [Americans with Disabilities Act] 
ADA,'' and noted that ``[t]he Equal Employment Opportunity Commission 
has been aggressively challenging employers whose drug screens lead to 
denial of a job without an individualized assessment to determine 
whether the person's lawful use of prescription drugs may be considered 
a disability.'' However, the commenter never explained how the

[[Page 53048]]

proposed rule risks a conflict with the ADA.
    Department's Response: Section 620.3 of the NPRM sets forth a 
proposed list of occupations for which drug testing is regularly 
conducted. Proposed paragraph (j) of this section embodied the 
Department's new, more flexible, approach to identifying the 
occupations which regularly drug test, by allowing each State to 
identify additional occupations in that State where employers require 
pre-hire or post-hire drug testing as a standard eligibility 
requirement provided that the State has a factual basis for doing so. 
As explained in the NPRM, factual bases may include, but are not 
limited to: Labor market surveys; reports of trade and professional 
organizations; and academic, government, or other studies, and would be 
reviewed by the Department. See 83 FR 55311, 55315 (Nov. 5, 2018).
    Section 303(l)(1), SSA, permits States to drug test applicants 
whose only suitable employment is in an occupation that regularly 
conducts drug testing or who were terminated from employment with their 
most recent employer because of the unlawful use of a controlled 
substance; this rule does not authorize States to engage in conduct 
that would violate Federal disability non-discrimination laws, 
including the ADA. Indeed, States must continue to adhere to Federal 
disability non-discrimination law as a condition of receiving UC 
administrative grants under Title III of the SSA, and the annual 
unemployment insurance funding agreements between the Department and 
each State includes this requirement. Accordingly, the Department makes 
no changes to the final rule in response to this commenter's concern.
    Comments: A number of commenters stated that there is no evidence 
that unemployed workers are more likely to use drugs, while one 
commenter stated that there is no evidence suggesting that drug testing 
deters drug use. Several commenters raised concerns that drug testing 
UC applicants would do nothing to help people struggling with 
addiction, or to identify individuals in need of treatment.
    Department's Response: These regulations, which implement 42 U.S.C. 
503(l)(1)(A)(ii), specifically address drug testing of UC applicants 
for whom suitable work is only available in an occupation that 
regularly conducts drug testing.
    While the Department is without authority to use this rule to 
mandate drug treatment, UC applicants who fail drug tests may be 
encouraged to confront and overcome the challenges associated with 
substance use disorder by getting treatment, and to successfully return 
to the workforce.
    States may not pay those costs, including costs of providing 
information on substance use disorder or the cost of treatment, from 
Federal UI administrative grant funds. However, nothing in this rule 
prevents States from providing brochures or other information, paid for 
from other sources, on the availability of drug treatment to UC 
applicants who have failed a drug test. Moreover, as noted below, the 
Department has made funds available to States to address the effects of 
the opioid crisis on the economy.
    In March 2018, the Department announced a National Health Emergency 
demonstration project through Training and Employment Letter (TEGL) No. 
12-17, to identify, develop, and test innovative approaches to address 
the economic and workforce-related impacts of the opioid epidemic. In 
July 2018, the Department approved six grant awards, totaling more than 
$22 million, to the following states: Alaska ($1,263,194), Maryland 
($1,975,085), New Hampshire ($5,000,000), Pennsylvania ($4,997,287), 
Rhode Island ($3,894,875), and Washington State ($4,892,659).
    In September, 2018, the Department issued TEGL No. 4-18 to describe 
how the National Dislocated Worker Grant (Disaster Recovery DWG) 
Program's disaster grants apply to the unique challenges of the opioid 
crisis. All states, outlying areas, and appropriate tribal entities are 
eligible to apply for Disaster Recovery DWG assistance as described in 
TEGL No. 4-18. Eligible applicants use Disaster Recovery DWGs to create 
disaster-relief employment to alleviate the effects of the opioid 
crisis in affected communities, as well as provide employment and 
training activities, including supportive services, to address economic 
and workforce impacts related to widespread opioid use, addiction, and 
overdose.
    Therefore, the Department makes no changes to the final rule in 
response to these comments.
    Comments: Numerous commenters expressed concern over the 
possibility of positive test results that could occur because an 
applicant was taking prescription medication or over-the-counter 
medication. One commenter addressed drug testing of individuals who are 
enrolled in medication-assisted treatment for opioid addiction, noting 
that some drug tests can detect methadone and buprenorphine. A 
commenter noted that ``conventional urinalysis testing methods are 
prone to false positives,'' and that urinalysis indicates only the 
presence of a drug or metabolites in the body. One commenter stated 
that drug testing of chemically treated hair, or hair that is dark in 
color, ``can be especially susceptible to external contamination.''
    Department's Response: This rulemaking is limited to implementing 
the statutory requirement to identify occupations that regularly 
conduct drug testing. These comments regarding potential false 
positives are outside the scope of this rule, therefore, the Department 
makes no changes to the regulatory text in response to these comments.
    Comment: Another commenter asserted that drug testing UC applicants 
is a waste of tax dollars, and the ``only ones who will win in this 
case will be the companies billing the State after the test has been 
administered.''
    Department's Response: The purpose of this regulation is to 
implement the provision in 42 U.S.C. 503(l)(1)(A)(ii) that States may 
drug test applicants for UC for whom the only suitable work is in an 
occupation that regularly conducts drug testing. Thus, whether and to 
what extent a State's activities may benefit drug testing companies is 
unrelated to the purpose of this regulation. The Department makes no 
changes to the final rule as a result of this comment.
    Comments: A number of commenters expressed that drug testing of UC 
applicants undermines the purpose of the UC program. These commenters 
stated that making it more difficult for unemployed workers to access 
benefits blunts the UC program's capacity as a counter-cyclical 
economic tool and weakens the safety net.
    Department's Response: The purpose of this regulation is to 
implement the provision in 42 U.S.C. 503(l)(1)(A)(ii) permitting States 
to drug test UC applicants for whom the only suitable work is in an 
occupation that regularly conducts drug testing. The regulation does 
not require States to implement a drug testing program, and the basic 
eligibility requirements for UC are unchanged. To be eligible for UC, 
claimants must be able and available to accept suitable work. This rule 
allows States to implement drug testing as a means for ensuring that UC 
applicants for whom the only suitable work is in an occupation that 
regularly conducts drug testing can demonstrate that they are able and 
available to accept suitable work by passing a drug test. We also note 
that the drug testing provisions in 42 U.S.C. 503(l)(1)(A)(ii) are 
narrowly drawn. There will be minimal effect on the UC program's role 
in minimizing

[[Page 53049]]

economic impacts in an economic downturn.
    Therefore, the Department makes no changes to the final rule in 
response to these comments.

IV. Administrative Information

Paperwork Reduction Act

    The Department has determined that any use of the existing form MA 
8-7 under this rule is already approved under OMB control number 1205-
0222.

Plain Language

    The Department drafted this rule in plain language.

Regulatory Flexibility Act/Small Business Regulatory Enforcement 
Fairness Act

    The Regulatory Flexibility Act (RFA), at 5 U.S.C. 603(a), requires 
agencies to prepare and make available for public comment an initial 
regulatory flexibility analysis, which describes the impact of this 
final rule on small entities. Section 605 of the RFA allows an agency 
to certify a rule, in lieu of preparing an analysis, if the proposed 
rulemaking is not expected to have a significant economic impact on a 
substantial number of small entities. This rule does not affect small 
entities as defined in the RFA. Therefore, the rule will not have a 
significant economic impact on a substantial number of these small 
entities. The Department has certified this to the Chief Counsel for 
Advocacy, Small Business Administration, pursuant to the RFA.

Executive Order 13771

    Comments: The Department received one comment asserting that the 
proposed rule did not comply with Executive Order (E.O.) 13771 
(Reducing Regulations and Controlling Regulatory Costs).
    Department's Response: This final rule is not subject to E.O. 13771 
because the cost is de minimis. The drug testing of UC applicants as a 
condition of UC eligibility is entirely voluntary on the part of the 
States, and because permissible drug testing is limited under the 
statute and this rule, the Department believes only a small number of 
States will establish a testing program for a limited number of 
applicants for unemployment compensation benefits.

Executive Orders 12866 and 13563: Regulatory Planning and Review

    Comment: The Commenter argues that the Department's cost and 
benefits analysis was ``cursory and unrigorous;'' the argument relies 
on the Department's admission that it lacked data to quantify 
administrative costs.
    Department's Response: E.O.s 12866 and 13563 direct agencies to 
assess all costs and benefits of available regulatory alternatives, 
and, if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health, and safety effects, distributive impacts, and equity). 
E.O. 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. For a ``significant regulatory action,'' E.O. 12866 asks 
agencies to describe the need for the regulatory action and explain how 
the regulatory action will meet that need, as well as assess the costs 
and benefits of the regulation.\1\
---------------------------------------------------------------------------

    \1\ Exec. Order No. 12866, section[thinsp]6(a)(3)(B).
---------------------------------------------------------------------------

    This regulation is necessary because of the statutory requirement 
contained in 42 U.S.C. 503(l)(1)(A)(ii), which requires the Secretary 
to determine the occupations that regularly conduct drug testing for 
the purpose of determining which applicants may be drug tested when 
applying for unemployment compensation. This rule is a ``significant 
regulatory action,'' as defined in sec. 3(f) of E.O. 12866, because it 
raises novel legal or policy issues arising out of legal mandates. 
Before the amendment of Federal law to add the new 42 U.S.C. 503(l)(1), 
Federal law did not permit drug testing of applicants for UC as a 
condition of eligibility.
    The decision to conduct drug testing for any of the occupations 
identified in the final rule is entirely voluntary on the part of the 
States (see Sec.  620.4). To date, only three States (Mississippi, 
Texas, and Wisconsin) have enacted laws to permit drug testing of UC 
applicants under the circumstances addressed by this rule. These 
States, however, have not yet begun testing because the prior rule was 
rescinded, and this rule was not yet published. As a result, the 
Department does not have sufficient information to determine how many 
States will establish a drug testing program, and what the costs and 
benefits of such a program might be to States. Before the enactment of 
the Federal law in 2012, States were not permitted to condition 
eligibility for UC on drug testing. Due to variations among States' 
laws, and in the number of UC applicants, level of benefits, and 
prevalence of drug use in a State, the Department is unable to estimate 
the extent to which States' costs in administering drug testing would 
be offset by savings in their UC programs.
    The Department requested comments on the costs of establishing and 
administering a State-wide testing program; the number of applicants 
for unemployment compensation that fit the criteria established in the 
law; estimates of the number of individuals who would subsequently be 
denied unemployment compensation due to a failed drug test; and the 
offsetting savings that could result. The Department received comments, 
discussed below, on the costs of establishing and administering a 
testing program and the cost of drug tests. However, no other comments 
were received providing specific information on the other issues on 
which the Department requested comment.
    Comments: One commenter wrote that Ohio had a 4.3 percent 
unemployment rate as of May 2018, which equates to approximately 
530,000 unemployed workers in Ohio. At an average cost of $30 per drug 
test, it would cost $18 million to test UC applicants. The commenter 
stated that that money could instead be allocated for improving 
infrastructure issues, drug treatment programs, education programs, and 
job training programs.
    A number of commenters wrote that States would spend much more to 
implement a drug testing program than it would be worth in savings to 
the UI trust funds. These commenters stated that when 13 States spent 
$1.6 million collectively to drug test Temporary Assistance for Needy 
Families (TANF) applicants in 2016, only 369 people tested positive out 
of approximately 250,000. The commenters argued that because States are 
experiencing record-low administrative funding, they cannot afford 
additional administrative burdens, particularly when few people tested 
positive.
    Only three States have enacted laws to pursue drug testing of UC 
applicants under this statutory provision to date, and they have not 
yet begun testing. There are limited data on which to base estimates of 
the cost associated with establishing a testing program, or the 
offsetting savings that a testing program could realize. Only one of 
the three States that enacted conforming drug testing laws issued a 
fiscal estimate. That State, Texas, estimated that the 5-year cost of 
administering the program would be $1,175,954, taking into account both 
one-time technology personnel services to program the system and 
ongoing administrative costs for personnel. The Department has not 
evaluated the methodology of Texas' estimate. Separately, it would be 
inappropriate to extrapolate the Texas cost analysis to all States, in 
part

[[Page 53050]]

because of differences between Texas law and the laws of other States, 
and because of the variations in States' programs noted above. 
Therefore, the Department cites this information only for the purpose 
of disclosing the minimal information available for review.
    One commenter wrote that drug tests can be expensive and that funds 
could be reappropriated for initiatives such as rehabilitation, common-
sense drug education, and overdose first aid. The commenter also stated 
that it is not the States' duty to drug test unemployed workers; 
rather, it is a potential employer's duty to test applicants if the 
employer wishes.
    Several commenters wrote that the cost of drug testing would be an 
unnecessary drain on resources that should be made available to workers 
affected by reductions in force. The commenters argued that the 
financial costs would far outweigh any savings from drug testing UC 
applicants and would place further stress on State budgets, especially 
when the Federal grants that States principally rely on to administer 
their programs have been reduced significantly. Simply put, these 
commenters concluded that drug testing is not a good use of scarce 
resources.
    One commenter wrote that studies have shown that the vast majority 
of individuals receiving public assistance do not use drugs. The 
commenter supports a policy orientation in favor of an exercise of this 
authority, if at all, only for occupations in which the rationale for 
drug testing is truly compelling.
    Two commenters wrote that Michigan has unsuccessfully attempted to 
test recipients of cash assistance. In 2000, a Michigan law providing 
for random testing of welfare recipients was declared unconstitutional 
by a federal court. In 2016, Michigan administered a pilot program of 
suspicion-based drug testing, but no recipients or applicants were 
tested. The commenters argued that these programs did not save money or 
reveal any undeserving claimants--they merely increased administrative 
costs. These commenters asserted that States may be pressured by this 
final rule to use already-limited UI funding to establish and 
administer a testing program.
    Department's response: The Department carefully reviewed the 
comments and concluded that they did not adequately provide reliable 
information on the costs of establishing and administering a State-wide 
testing program; the number of applicants for UC who would be tested; 
and individuals who would subsequently be denied UC due to a failed 
drug test. In the absence of such data, the Department is unable to 
quantify the administrative costs States would incur if they choose to 
implement drug testing pursuant to this final rule.
    As explained above, nothing in the Act amending section 303, SSA, 
or in this regulation requires States to establish a drug testing 
program. See Sec.  620.4 of this final rule. States may choose to enact 
legislation to permit drug testing of UC applicants consistent with 
Federal law. In doing so, States will make that decision based on many 
factors, including the costs and benefits of a drug testing program 
that is limited to only those UC applicants specifically permitted to 
be drug tested as a condition of UC eligibility in the Act.
    The Department reiterates that States will voluntarily make their 
own determination whether to establish a testing program. States may 
determine that current funding for the administration of State UC 
programs is insufficient to support the additional costs of 
establishing and administering a drug testing program, which would 
include the cost of the drug tests, staff for administration of the 
drug testing function, and technology to track drug testing outcomes. 
States would also incur ramp-up costs to implement the processes 
necessary for determining whether an applicant is one for whom drug 
testing is legally permissible; referring and tracking applicants for 
drug testing; and conducting and processing the drug tests. States 
would also have to factor in the increased costs of adjudication and 
appeals of both the determination that an individual is subject to drug 
testing and resulting determinations of benefit eligibility based on 
the test results. However, these costs could vary widely across States, 
and the Department has no ability to develop an estimate that could be 
relevant across multiple States.
    The benefits of the rule are equally difficult to quantify. As 
explained above, the Texas analysis estimated a potential savings to 
the Unemployment Trust Fund of $13,700,580 over the 5-year period, 
resulting in a net savings of approximately $12.5 million. However, due 
to differences in State laws, the number of claims, benefit levels, and 
the prevalence of substance use disorder in a State, the Department is 
unable to use the savings anticipated by Texas as a national norm. In 
addition, as previously discussed, permissible drug testing is limited 
under the statute and this rule; the Department expects only a small 
number of UC applicants will be tested. As such, the Department makes 
no changes as a result of these comments.

Executive Order 13132: Federalism

    Comment: The specific comment regarding noncompliance with E.O. 
13132 is that the rule would permit drug testing of UC applicants when 
testing is required under Federal law, and that the rule would have a 
substantial effect on States by compelling them to provide a factual 
basis for imposing a drug-testing requirement using ETA form MA 8-7.
    Department's Response: Section 6 of E.O. 13132 requires Federal 
agencies to consult with State entities when a regulation or policy may 
have a substantial direct effect on the States, the relationship 
between the national government and the States, or the distribution of 
power and responsibilities among the various levels of government, 
within the meaning of the E.O. Sec. 3(b) of the E.O. further provides 
that Federal agencies must implement regulations that have a 
substantial direct effect only if statutory authority permits the 
regulation and it is of national significance.
    E.O. 13132, sec. 3, establishes Federalism Policymaking Criteria 
that agencies must follow when formulating and implementing policies 
with Federalism implications. Those criteria include:
     That agencies consider statutory authority for any action 
that would limit State policymaking discretion;
     That the national government grant States maximum 
administrative discretion possible; and
     That agencies encourage States to develop their own 
policies to achieve program objectives and, where possible, defer to 
States to develop standards.
    This rule accomplishes each of the requirements set out above. 
First, the Department is required by 42 U.S.C. 503(l)(1)(A)(ii) to 
identify in regulation the occupations that regularly conduct drug 
testing. State UC agencies are permitted to drug test UC applicants for 
whom the only suitable work is in an occupation that regularly drug 
tests. Thus, the Department has statutory authority to issue this 
regulation.
    Second, this rule gives States significant flexibility to identify 
additional occupations in their State that regularly drug test job 
applicants, either pre-hire or post-hire based on a factual analysis. 
See sections 620.3 and 620.4 of this final rule.
    Third, this rule encourages States that choose to enact drug 
testing legislation as permitted by 42 U.S.C. 503(l)(1)(A)(ii) to 
develop policies and establish standards to achieve the program 
objectives, consistent with Federal law.

[[Page 53051]]

The Department retains oversight responsibility to ensure State law 
conforms to, and the State is in compliance with, Federal UC law.
    Thus, this rule does not have a substantial direct effect on the 
States, the relationship between the national government and the 
States, or the distribution of power and responsibilities among the 
various levels of government within the meaning of the E.O. because 
drug testing authorized by the regulation remains voluntary on the part 
of the State--it is not required.

Unfunded Mandates Reform Act of 1995

    Comment: The commenter states that the Department incorrectly 
concluded that the Unfunded Mandates Reform Act of 1995 does not apply 
to this rule. The commenter's reasoning is that required drug testing 
under other federal laws would be required of a State that enacts a 
drug testing law consistent with 42 U.S.C. 503(l)(1)(A), and that the 
State UC agency would have unfunded mandates conditioned on designating 
some occupations for drug testing.
    Department's Response: The Unfunded Mandates Reform Act of 1995 
defines ``Federal Intergovernmental Mandate'' to mean ``any provision 
in legislation, statute, or regulation that (i) would impose an 
enforceable duty upon a State. . . .''
    This regulation does not impose any duty on States; rather, it 
permits States, consistent with the statutory authority in 42 U.S.C. 
503(l)(1)(A) to enact legislation to test UC applicants for drugs under 
the limited circumstances set out in the statute. The requirement that 
States submit the factual basis for identifying an occupation under 
Sec.  620.3(j) of the regulation using ETA form MA 8-7 is consistent 
with long-standing procedures by which States must inform the 
Department of changes in State law.

Effect on Family Life

    Comment: The commenter referred to at the beginning of this 
discussion of compliance with several E.O.s and statutory requirements 
questions the Department's certification that this rule does not impact 
family well-being. The commenter cites the requirement in section 
654(c) of the Treasury and General Government Appropriations Act that 
agencies must determine whether the action increases or decreases 
disposable income or poverty of families and children and determine 
whether the proposed benefits of the action justify the financial 
impact on the family.
    Department's Response: This regulation has no impact on family 
well-being because it merely affords States an option that they must 
independently choose. Allowing States to drug test UC applicants in the 
very limited circumstances set out in 42 U.S.C. 503(l)(1)(A)(ii) does 
not, in and of itself, increase or decrease disposable income or 
poverty, or otherwise affect family well-being.
    Based on available data (or lack thereof), it is impossible for the 
Department to predict the number of States that will exercise this 
option or how broadly they will implement any drug testing in their 
State. Similarly, there is no existing data or way to predict, 
positively or negatively, what impact, if any, such State drug testing 
may have on family well-being. This regulation only implements the 
provision in 42 U.S.C. 503(l)(1)(A)(ii) that States may drug test 
applicants for UC for whom the only suitable work is in an occupation 
that regularly conducts drug testing.
    Thus, the Department makes no change to its certifications that the 
rule complies with each of the Executive Orders and other provisions 
discussed above.

List of Subjects in 20 CFR Part 620

    Unemployment compensation.


0
For the reasons stated in the preamble, the Department amends 20 CFR 
chapter V by adding part 620 to read as follows:

PART 620--DRUG TESTING FOR STATE UNEMPLOYMENT COMPENSATION 
ELIGIBILITY DETERMINATION PURPOSES

Sec.
620.1 Purpose.
620.2 Definitions.
620.3 Occupations that regularly conduct drug testing for purposes 
of determining which applicants may be drug tested when applying for 
State unemployment compensation.
620.4 Testing of unemployment compensation applicants for the 
unlawful use of a controlled substance.
620.5 Conformity and substantial compliance.

    Authority:  42 U.S.C. 1302(a); 42 U.S.C. 503(l)(1)(A)(ii).


Sec.  [thinsp]620.1   Purpose.

    The regulations in this part implement 42 U.S.C. 503(l). 42 U.S.C. 
503(l) permits States to enact legislation to provide for State-
conducted testing of an unemployment compensation applicant for the 
unlawful use of controlled substances, as a condition of unemployment 
compensation eligibility, if the applicant was discharged for unlawful 
use of controlled substances by his or her most recent employer, or if 
suitable work (as defined under the State unemployment compensation 
law) is only available in an occupation for which drug testing is 
regularly conducted (as determined under this part). 42 U.S.C. 
503(l)(1)(A)(ii) provides that the occupations that regularly conduct 
drug testing will be determined under regulations issued by the 
Secretary of Labor.


Sec.  [thinsp]620.2  Definitions.

    As used in this part--
    Applicant means an individual who files an initial claim for 
unemployment compensation under State law. Applicant excludes an 
individual already found initially eligible and filing a continued 
claim.
    Controlled substance means a drug or other substance, or immediate 
precursor, included in schedule I, II, III, IV, or V of part B of 21 
U.S.C. 801 et seq., as defined in Sec. 102 of the Controlled Substances 
Act (21 U.S.C. 802). The term does not include distilled spirits, wine, 
malt beverages, or tobacco, as those terms are defined or used in 
subtitle E of the Internal Revenue Code of 1986.
    Occupation means a position or class of positions with similar 
functions and duties. Federal and State laws governing drug testing 
refer to classes of positions that are required to be drug tested. 
Other taxonomies of occupations, such as those in the Standard 
Occupational Classification (SOC) system, may be used by States in 
determining the boundaries of a position or class of positions with 
similar functions and duties under Sec.  620.3. Use of the SOC codes, 
however, is not required, and States may use other taxonomies to 
identify a position or class of positions with similar functions and 
duties.
    Suitable work means suitable work as defined by the unemployment 
compensation law of a State against which the claim is filed. It must 
be the same definition the State law otherwise uses for determining the 
type of work an individual must seek, given the individual's education, 
experience, and previous level of remuneration.
    Unemployment compensation means any cash benefits payable to an 
individual with respect to the individual's unemployment under the 
State law (including amounts payable under an agreement under a Federal 
unemployment compensation law).

[[Page 53052]]

Sec.  [thinsp]620.3  Occupations that regularly conduct drug testing 
for purposes of determining which applicants may be drug tested when 
applying for State unemployment compensation.

    In electing to test applicants for unemployment compensation under 
this part, States may enact legislation to require drug testing for 
applicants for whom the only suitable work is in one or more of the 
following occupations that regularly conduct drug testing, for purposes 
of Sec.  620.4:
    (a) An occupation that requires the employee to carry a firearm;
    (b) An occupation identified in 14 CFR 120.105 by the Federal 
Aviation Administration, in which the employee must be tested;
    (c) An occupation identified in 49 CFR 382.103 by the Federal Motor 
Carrier Safety Administration, in which the employee must be tested;
    (d) An occupation identified in 49 CFR 219.3 by the Federal 
Railroad Administration, in which the employee must be tested;
    (e) An occupation identified in 49 CFR 655.3 by the Federal Transit 
Administration, in which the employee must be tested;
    (f) An occupation identified in 49 CFR 199.2 by the Pipeline and 
Hazardous Materials Safety Administration, in which the employee must 
be tested;
    (g) An occupation identified in 46 CFR 16.201 by the United States 
Coast Guard, in which the employee must be tested;
    (h) An occupation specifically identified in Federal law as 
requiring an employee to be tested for controlled substances;
    (i) An occupation specifically identified in the State law of that 
State as requiring an employee to be tested for controlled substances; 
and
    (j) An occupation where the State has a factual basis for finding 
that employers hiring employees in that occupation conduct pre- or 
post-hire drug testing as a standard eligibility requirement for 
obtaining or maintaining employment in the occupation.


Sec.  [thinsp]620.4  Testing of unemployment compensation applicants 
for the unlawful use of a controlled substance.

    (a) States may require drug testing for unemployment compensation 
applicants, as defined in Sec.  620.2, for the unlawful use of one or 
more controlled substances, as defined in Sec.  [thinsp]620.2, as a 
condition of eligibility for unemployment compensation, if the 
individual is one for whom suitable work, as defined in State law, as 
defined in Sec.  620.2, is only available in an occupation that 
regularly conducts drug testing as identified under Sec.  
[thinsp]620.3.
    (b) A State conducting drug testing as a condition of unemployment 
compensation eligibility, as provided in paragraph (a) of this section, 
may only elect to require drug testing of applicants for whom the only 
suitable work is available in one or more of the occupations listed 
under Sec.  620.3. States are not required to apply drug testing to any 
applicants for whom the only suitable work is available in any or all 
of the occupations listed.
    (c) No State is required to drug test UC applicants under this part 
620.


Sec.  [thinsp]620.5  Conformity and substantial compliance.

    (a) In general. A State law implementing the drug testing of 
applicants for unemployment compensation must conform with--and the 
law's administration must substantially comply with--the requirements 
of this part 620 for purposes of certification under 42 U.S.C. 502(a), 
governing State eligibility to receive Federal grants for the 
administration of its UC program.
    (b) Resolving issues of conformity and substantial compliance. For 
the purposes of resolving issues of conformity and substantial 
compliance with the requirements of this part 620, the provisions of 20 
CFR 601.5 apply.

John P. Pallasch,
Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2019-21227 Filed 10-3-19; 8:45 am]
BILLING CODE 4510-FW-P